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[Jimmy-T]

As NSW assesses what would happen if insurance commissions to strata managers were banned, one major player digs in its heels.

[See the full post at: Strata wars – the PICA empire strikes back]

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[Stratalyzer]

Quote from one industry insider: “Doesn’t Bobby Lehane realise the damage they are doing to their brand reputation?”

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[dy]

Our strata manager ‘argues’ that insurance commissions are necessary to keep their monthly fees low. Wonder what will happen going forward ?

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[Jimmy-T]

There’s a case for saying it costs X amount to service each lot multiplied by n (the number of units) plus Y for the insurance minus Z (the insurance commission, roughly 20 per cent of the premium).

The question that no one is asking is, why are the insurers more than happy to maintain this corruption of the system?

Strata managers need to establish a baseline fee below which they can’t offer services, based roughly on the size of the apartment blocks, then let them compete on quality of service, not how low they can go supported by inflated insurance commissions.

If you want to be alerted when anyone replies to your posts or responds to this topic, please register and login, then you will be able to subscribe to the topic. The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers. NB: Longer threads may spill over to additional pages - look for the numbers on the bottom right, under the last post.

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[optusJo]

It would also be reasonable i think to “stratify fee structure” – it seems obvious that managing  12 lots is very different to managing 100 lots or more.  Would the SCA Contract allow for this?

Woukd it be possible to have “roving” Strata Managers charging fees for specific services?  I suppose that would mean a lot more work on the committee being “on top of it all”?

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[StrataChair]

There’s nothing wrong with a strata manager being paid for the time involved in arranging insurance.

But that’s not what commission is for.

It’s one of several ways some strata managers artificially lower their ‘management fee’ when they’re pitching for new business. Its sole purpose is to win business against honest competitors by concealing part of their remuneration – which is, of course, paid by their clients.

It’s designed to deceive and mislead. That’s why it has to go.

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[Author]

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